Proposed FAR Amendment: Adjusting Statutory Acquisition-Related Thresholds for Inflation

On November 29, 2024, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration proposed an amendment to the Federal Acquisition Regulation (FAR) to further implement 41 U.S.C. 1908. Section 1908 requires that every five years on October 1, all statutory-related thresholds (except for the Construction Wage Rate Requirements statute, Service Contract Labor Standards statute, performance and payment bonds, and trade agreements thresholds) be adjusted for inflation using the Consumer Price Index (CPI).  

The last adjustment to statutory acquisition–related thresholds for inflation was made effective October 1, 2020. This proposed rule is expected to take effect October 1, 2025. The agencies anticipate that this rule will mitigate the impact of inflation on the public and the government. Interested parties may submit written comments for consideration in the final rule by January 28, 2025.  

Once the proposed rule is finalized and made effective, government contractors should evaluate their thresholds to ensure they are not performing unnecessary work.  

The following table summarizes the impact the proposed rule would have on different thresholds commonly relied on by government contractors.

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